Iranian Vehicles Market in 2025 is shrinking. H1 figures fell 5.5% after the mild recovery during Q1. Chery was the only Top 10 brand not to report losses and instead grow 8%.
Economic Environment
In 2025, the IMF forecasts Iran’s economy to grow modestly, with real GDP expanding by just 0.3%, a sharp slowdown from 3.4% in 2024. GDP at current prices is projected to decline significantly from $401 billion to $341 billion, even as the economy’s size based on purchasing power parity rises to $1.746 trillion. GDP per capita (PPP) is expected to fall slightly to $17,103. Inflation is forecast to rise sharply, from 32.6% in 2024 to 43.3% in 2025, reflecting continued economic pressures.
Exports are set to contract by 5%, reversing last year’s 4.6% growth, while imports are expected to shrink by 9.6% after a strong 10.6% rise in 2024. Despite this, Iran is anticipated to maintain a $3 billion current account surplus, though down from $10.9 billion last year. Unemployment is projected to rise to 9.5%, up from 7.7%, amid slower economic activity. Government revenues are expected to decline to 9.5% of GDP, while expenditures edge up to 14.9%, pushing public debt higher to 39.9% of GDP. Investment will remain stable at 39% of GDP, indicating some resilience in capital formation.
Automotive Industry Trend And Outlook
After the negative performance of 2024, Iran’s vehicle market continues to struggle. Despite the positive performance during Q1, sales turned negative in Q2 to close H1 down 5.5%.
Brand-wise, the leader was still Saipa (-3,9%) with a share of 45.9%. Peugeot (-5.8%) followed in 2nd with a share of 29.4% while Iran Khodro (-7.8%) ranked 3rd with a share of 19.1%.
Chery in 6th was the only brand to report gains, up 8% into 6th.
Medium-Term Market Trend
Despite Iran’s production capacity and strategic influence in the Middle East, its automotive industry continues to struggle under the weight of international sanctions. The result is limited global integration and outdated technology, leading to significant hurdles for state-backed manufacturers like Iran Khodro and SAIPA, which supply the majority of vehicles sold locally.
The 2014 Geneva Agreement offered a temporary lift of some sanctions, enabling a period of market recovery. However, this progress was reversed when President Trump unilaterally withdrew from the deal and reinstated harsh sanctions, causing a sharp decline in sales. The market contracted dramatically, losing 23.1% of volume in 2018 and 33.6% in 2019, falling to just 793,735 units.
The COVID-19 pandemic did not hinder the Iranian vehicle market, instead, vehicle sales grew by 15.3% in 2020, followed by a 24% increase in 2022, once again surpassing the one million mark. However, this rebound was short-lived. In recent years, the market entered another phase of contraction due to a combination of rising inflation, currency devaluation, supply chain disruptions from tightened U.S. sanctions, and energy crises affecting industrial output. These factors culminated in a 4.7% market decline in 2024.
Tables with sales figures
In the tables below we report sales for Top 10 Models
